MINING

I INTRODUCTION
Brief Historical Background
Digging deep into history, mining in the Philippines is one of the oldest industries in the country. Gold mining in Luzon started even in the 3rd century as reported by the Chinese merchants. Before the advent of the Spanish rule, metals—primarily gold—played an important role in shaping traditions and rituals, in indigenizing certain features of Filipino beliefs, and in developing patterns of wealth, power and authority during the period.
The spirit of Spanish expansionism was at its crest when it reached the Philippines in the second half of the sixteenth century. The archipelago became the base of further efforts to conquer and evangelize new areas and design new trade routes in search primarily of spices but also of gold and other precious merchandise. The Spaniards failed to develop mining in the country, but left behind one of the basic building blocks of the present-day mining laws–the Regalian Doctrine. In essence, the Regalian Doctrine stipulates that all minerals and substances underneath all lands, public or private belong to the state. In effect, the law rests on the principle of eminent domain which reserves to the state the right to develop the mines on its own initiative or through private concessions.
With the Americans, mining industries accelerated as the country’s economy strengthened its links to the needs of the industrialized countries like the US. The growth of the mining industry in the Philippines under the Americans may be said to have undergone three stages: (a) 1899-1919; (b) 1920-30; and (c) 1930-42. The first stage could be associated to the rapid technological change during the last quarter of the nineteenth century in the United States. The second period was characterized by the first local gold boom precipitated by the sensational gold finds in Benguet and Balatoc. In the 1930’s, the third period, was the era of the second gold boom. In 1935, the Philippines produced more gold than Alaska and its outputs only second to California’s. Gold was the third most important commodity in the Philippine export trade.
The gold, copper, and iron ore mining booms of the 1930s and early 1940s were rudely disrupted by the entry of the Japanese invading forces. The war wrought tremendous havoc in the mining industry. The start of the war caused widespread damage in the mining industry. It took almost a decade for the industry to recover.
There were almost 50 mining corporations in the 1950s at least 40 of those were Filipino controlled. And although gold performed poorly in the world market, this was more than offset by the strong performance of copper. The Marcos government pursued mining as “the industry of the 70’s.” It created a new law that fast-tracked the processing of claims and the development of mining projects; guaranteed foreign loans taken out by local investors in minerals; and developed five-year, 10-year and long term blueprints for the mining industry.
For almost four decades, from 7 November 1937 to 17 May 1974, the mining industry was regulated by the Commonwealth Act No. 137, otherwise known as the Mining Act of 1936. This pre-war statute incorporated many features of the old Philippine Bill of 1902, which, in turn, had been based on the American policy of mineral exploitation set forth in the Federal Mining Act of 1872 of the United States. The colonial character of the mining industry was clearly reflected in the mining laws intended to regulate it. (Ibon Facts and Figures: March 1998)
There were various proposals to overhaul the legislative framework for the industry. The Martial Law Years were considered to be the ‘Filipinization’ of the local mining industries because direct foreign ownerships were reduced, however, the Marcos faction of the local elites–known as the Cronies–were the only ones benefited. Foreign equity control remained strong.
However, except for a brief boom in 1988-89, the mining industry struggled from the mid-80s through the 1990’s. There are several reasons cited by the government to explain the demise of the industry. These are the decline in world prices of minerals and the higher costs of maintaining the mines and/or exploration, development and operation of new mineral deposits. However, the more fundamental reasons for the industry’s failure is that its heavy reliance on the world market for capital inputs such as machinery offsets its dollars earnings from exports. The industry exports cheap raw or semi-processed mineral products, then imports expensive finished mineral products. (Lopez: 1992)
The Mining Law of 1995 was put in place to revive the demised mining industry, creating a more favorable climate–such as mode of entry options, enhanced incentives, and others–for investments into the industry. However, a year after the Mining Law was approved, NGOs along with other environmental lawyers questioned the constitutionality of the Mining Act of 1995 and filed a case at the Supreme Court, claiming that the provisions of the so-called Financial and Technical Assistance Agreement (FTAA), through which 100 percent foreign-owned entities are allowed to exploit the country’s mineral resources, was unconstitutional. It is provided for in the 1987 Philippine Constitution that a mining contractor should comply with the 60-40 equity requirement. However, the Supreme Court ruled that the 1995 Mining Act was constitutional.
The administration of Former-President Gloria Arroyo issued Executive Order No. 270, known as the Minerals Action Plan, on January 16, 2004 and was amended on April 20, 2004. This provides for the revitalization of the mining industry through the promotion of responsible mining that adheres to the principles of sustainable development and translates into economic, environmental, and social development.
If gold had kept the mining industry humming in the 1920s and 1930s and copper in the 1950s and 1960s, it was nickel’s turn for the 1970’s and the 1980s. The Philippines is one of the 24 countries in the world blessed with nickel deposits of mineable quantity. The province of Surigao has the biggest deposit of nickeliferous laterite, the second type of nickel, in the country and is considered one of the largest in the world. Other nickel deposits of the country can be found in the provinces of Isabela, Zambales, Pangasinan, the Quezon-Camarines Norte boundary, Camarines Sur, Occidental Mindoro, Romblon, Eastern Samar, Leyte del Norte, Davao Oriental, Misamis Oriental and Palawan. (Lopez: 1992) Palawan is a biodiversity hotspot in the Philippines. Few places on earth can match the distinction of the province, home to seven protected areas, a declared “Game Refuge and Bird Sanctuary” since 1967, and a “Mangrove Reserve” since 1981. UNESCO declared the whole Province a Man and Biosphere Reserve in 1990. In Palawan are two World Heritage Sites: The Tubbataha Reef Marine Park and the Puerto Princesa Subterranean River National Park. The expansive reserves of metal ores particularly nickel and chromite, which lay underneath old growth forests, attracts mining investments into the province. (Impact, 45:7: 2011)
Currently, around 400 mining applications are still waiting for their approval in the office of the DENR. These applications threaten Palawan. Even before the revitalization act of mining industries in the Philippines, Palawan already have the 1992 Strategic Environmental Plan for Palawan Act to ensure conservation and preservation of Palawan’s natural resources. This SEP Law promotes sustainable development; thus, encouraging eco-tourism rather than mining industries in the Province of Palawan.

Statement of the Problem
This research study is a case study on the revitalization of the mining industry in the Philippines under the Mining Act of 1995 focusing on the province of Palawan. It aims to answer the question: What are the socio-political, economic and ecological implications of the revitalization of mining industry in the Philippines?
Rationale
The province of Palawan is known as the Philippine’s “last ecological frontier”–with 17 key biodiversity sites, 7 protected areas, and 2 World Heritage sites. It is the home to the 105 out of 475 threatened species. Endowed with rich biodiversity, a number of laws were created in order to preserve and protect Palawan’s natural environment–among these are the declaration of UNESCO Man and Biosphere Reserve, Mangrove Reserve and Wildlife Reserve.
To further protect and preserve the unique ecological system not found in any part of the world, the Republic Act No. 7611 was promulgated creating the “Strategic Environmental Plan (SEP) for Palawan Act” and the Palawan Council for Sustainable Development (PCSD) to oversee its implementation. The SEP provides a comprehensive framework for the sustainable development of Palawan compatible with protecting and enhancing the natural resources and natural environment of the province.
Aside from its rich biodiversity, the province of Palawan is also rich with nickel ore deposits which make it an attractive mining investments destination. Although mining appears to be the surest way to gain economic wealth for the country, it cannot also be denied that it is also an ecologically destructive industry. The province of Palawan, being the “Philippine’s Last Frontier,” is vulnerable enough to cater the demands of the mining industry. However, with the mining liberalization under the Philippine Mining Law of 1995 and the implementation of the Mining Revitalization Program of 2003, mining activities were allowed in the province even in key biodiversity sites.
Thus, the presence of the mining activities in the area seemingly contradicts the existing policies and programs–such as the SEP and the PCSD–that aims to protect and enhance the natural resources and natural environment of the province. Given this contradiction, the researchers came up with this research study to determine the socio-political, economic and ecological implications of the revitalization of the mining industry in the province of Palawan.
Objectives
This paper aims to determine the political, economic and ecological impacts of the revitalization of the mining industry in Palawan under the 1995 Mining Act.
Specifically, it aims to answer the following questions: * What are the economic implications of the liberalization of the Philippine mining industry? In what ways did it affect the financial profile and debt situation of the Philippines? * What are the factors that pushed to revitalize the mining industry? * What are the associated environmental/ecological risks of mining? * How would this affect the Green Policy of the whole province of Palawan? * What political and economic benefits can the Philippines gain because of the revitalization of the mining industry? * How would this affect the political and economic development of the Philippines?
Significance of the Study As a response to the existing conflicts and problems of the mining industries, the researchers aim to produce an in depth analysis on the implications of the revitalization of the mining industries in the Philippines particularly in the case of Palawan using the neo-liberalist theory. With this, the discussion and analysis in this study will generate further knowledge and deeper understanding on mining industries in the Philippines, especially in the case of Palawan. With the Philippine Mining Act of 1995 as a landmark legislation that liberalized the mining industry in the Philippines, this study will examine how such liberalization of mining industries came to create socio-political and economic implications to the Province of Palawan. We, the researchers, would think of this study as an important material for future researchers, in cases of parallel studies.
Scope and Limitations
Considering the broad issue regarding the case of Mining Industries in Palawan, this research study would like to focus mainly on determining and identifying the socio-political and economic implications of the revitalization of mining industries in the case of Palawan, Philippines. With the strong push of the Philippine government for active mining and liberalized mining activities under the Philippine Mining Act of 1995, this study would like to examine how this revitalization of mining industries in Palawan affects the indigenous people, the environment and the economic aspect of the country.
Definition of Terms
Biodiversity- is the degree of variation of life forms within a given ecosystem, biome, or an entire planet
Concessions- is a business operated under a contract or license associated with a degree of exclusivity in business within a certain geographical area
Conditionality-the way which states or international institutions impose conditions upon developing countries in advance of distributing economic benefits.
Inundation- the rising of a body of water and its overflowing onto normally dry land
Siltation -is the deposition and accumulation of land-based soils and sediments due to erosion.
Sustainable Development- refers to the enhancement of the quality of life of contemporary people without impairing the welfare of future generations. In the academic world, neoliberal generally refers to the neo-liberal institutionalism or what is now called institutional theory by those writing in this theoretical domain. However, in the policy world, neo-liberalism is identified as to promote of free trade or open markets and western democratic values and institutions. Institutions, in a neo-liberal perspective, is seen as persistent and as connected set of rules and practices that prescribe roles, constrain activity, and shape the expectations of actors. Institutions may include organizations, bureaucratic agencies, treaties and agreements, and informal practices that states accept as binding.
Essentially, neoliberalism views international institutions as the backbone of the international system–it is the international institutions that regulate the states at the international level. Such international institutions include the World Bank, the World Trade Organization, and the International Monetary Fund. The liberalization of the Philippine mining industry is part of a series of structural adjustment programs began by the World Bank and the International Monetary Fund (IMF) in 1980. From that year till the present, structural adjustment has followed three phases: Phase 1, from 1980 to 1983, which emphasized trade liberalization; Phase 2, from 1983 to 1992, which focused on stabilization and debt repayment; and, Phase 3, from 1992 to the present, which is characterized by the push for “all-sided free market transformation marked by rapid deregulation, privatization and trade and investment liberalization.”
It is in the third phase of the program that the process of liberalizing the mining industry began, with the Republic Act 7942 already in place by March of 1995. Mining has long been a major contributor to the Philippine economy. In the production of gold, copper, nickel and chromite, the country ranks among the world’s top 10 countries. As for mineral endowment, the Philippines is ranked second to South Africa in gold ore deposits, and ranks third in the world in terms of copper resources. In 1974 and 1980, mining accounted for 20.37 and 21.34 percent of the country’s total export receipts, respectively. For the period 1980- 1993, mining contributed about P 4.3 billion in tax revenues. With the liberalization of the mining industry, based on predictions made in 1998, the Philippines expects to attract about US $3.5 billion in initial investments for new mining projects in the next ten years, from 1998 to 2008. (Impacts of Investment Liberazation, a Summary Report)
The Republic Act 7942, or the Philippine Mining Ac of 1995, is the enabling law that has made possible the liberalization of the Philippine mining industry. It is consistent with the World Bank’s and the Asian Development Bank’s (ADB) agenda for trade and investment liberalization in the Philippines and thus faithful to the spirit of these IMF’s agenda of neoliberal economics. The IMF, in a 1990 staff report, took issue with what it perceived as the Philippines “relatively restrictive laws and regulations governing foreign investment in key sectors and called for foreign investment reforms…”
One of the Bank’s recommendations that were tied to a proposed loan by the Philippines for an Economic Integration program in 1992 was for the government to exert efforts to attract more foreign investors and to expand the coverage of foreign participation in various industries, including mining. The World Bank has been explicit in its stand and recommendations for mining sector reform particularly for South East Asia like the Philippines, to liberalize the mining sectors to “attract explorations and investments much needed by the under-performing mining sector.” Thus, the Philippines’ Mining Act of 1995, is consistent with the IMF’s and the World Bank’s prescriptions on liberalizing the mining industries. Conceptual Framework This research paper intends to use Neo Liberalism Theory to explain the role of international structures like the World Bank and the International Monetary Fund (IMF) in the formulation of state policies like the Philippine Mining Act of 1995. This study will also examine the co-existing relationship of the 1995 Mining Act and the Strategic Environmental Plan for Palawan Act of 1992 and how these two policies contradict each other and what are the socio-political, economic, and ecological implications of these.
Methodology
The case study primarily utilized secondary sources in the data gathering process. Between September 26 to October 6, 2011 the researchers gathered and analyzed the secondary data sourced from selected news clippings, journal articles, books, maps, official website of the Palawan Council for Sustainable Development and other internet sources related to the topic. Review of Related Literature
Impact of Mining Sector in Tarkwa, Ghana The resurgence in the mining industry in Ghana since 1989 is driven by the global paradigm which emphasizes private sector-led development as the engine of economic recovery in developing countries. This is indeed the thrust of the structural adjustment programmes (SAP) prescribed for such developing countries by the World Bank and allied institutions since the early 1980s. In these economic programmes, African countries with important mining sectors were obliged to shift their policy emphasis towards a primary objective of maximising tax revenue from mining over the long term, rather than pursuing other economic or political objectives such as control of resources or enhancement of employment. This primary objective, according to the World Bank, could only be achieved by a new division of labour whereby governments focus on industry regulation and promotion while private companies take the lead in operating, managing and owning mineral enterprises.
Ghana was among the first sub-Saharan countries to embark on these prescribed reforms and its mining sector received priority attention in the country’s Economic Recovery Programme launched in 1983.
To reflect the new paradigm, there were significant institutional development and policy changes between 1984 and 1995–the establishment of the Minerals Commission in 1984, promulgation of the Minerals and Mining Code in 1986, promulgation of the Small-Scale Mining Law in 1989 and the establishment of the Environmental Protection Agency in 1994.
The mining sector has witnessed a considerable investment boom and increased production, particularly in the gold sector, since the inception of Ghana’s economic policy changes in 1980. There has been considerable growth in the number of new mines and companies exploring for mineral sources. The sector has also attracted a significant number of sector support companies such as catering and transport companies, explosive manufacturers, mineral assay laboratories, etc. The sector has increased its contribution to gross foreign exchange earnings and appears to have attracted substantial foreign direct investment funds over the years.
Despite this boom, there is growing unease with regard to the real benefits accruing to the ordinary Ghanaian in the mining communities and to the country as a whole, in the light of the extremely generous fiscal and other incentives given to mining companies under the mining sector reforms.
Being the leading recipient of foreign direct investment capital, the mining sector has brought economic benefits to the country. Between 1986 and 1997, the sector attracted about US$3 billion of foreign direct investment, representing more than 60% of all such investment in the country. The most publicized benefits of the increased mining sector investments resulting from Ghana’s economic reforms include the following: Mining is the leading earner of foreign exchange in the country; provides substantial government revenue; provides capital and social infrastructure to the public; generates direct and indirect employment and develops communities in mining areas.
Despite of the perceived economic benefits brought about by the mining industry, other social and environmental concerns have emerged specifically in Tarkwa–one of the mining regions in Ghana. Concerns have been expressed about inadequate housing, youth unemployment and family disorganization. Although these issues were not new in the area, such cases have significantly risen into a level that the population perceives it to be threatening.
Between 1990 and 1998, mining investment in Tarkwa has led to the displacement of a total of 14 communities with a population of over 30,000. Some people had to migrate in search of farmland while others were relocated or resettled by the mining companies. The relocation and compensation measures implemented by various mining companies in the Tarkwa area have had serious consequences for the family as a close-knit social unit. Directly and indirectly, mining accounts for the high rate of unemployment in the area. Large-scale surface mining has taken up large tracts of land from farmers and mining activities cannot provide enough jobs to match the total number of people laid off from agriculture.
In most parts of Tarkwa, the environment is undergoing rapid degradation and its immense economic value is diminishing from year to year. Agricultural lands are not only generally degraded, but the decrease in land for agricultural production has also led to a shortening of the fallow period from 10-15 years to 2-3 years. To accommodate surface mining activities, considerable areas of land and vegetation in Tarkwa have been cleared. Currently, surface mining concessions have taken over 70% of the total land area of Tarkwa. It is estimated that at the close of mining a company would use 40-60% of its total concession space for activities such as siting of mines, heap leach facilities, tailings dump and open pits, mine camps, roads, and resettlement for displaced communities. The deforestation that has resulted from surface mining has long-term effects even when the soil is replaced and trees are planted after mine decommissioning. Some large and small-scale miners and illegal chainsaw operators are already threatening the three major forest reserves — Bonsa, Ekumfi and Neung — in the Tarkwa area. These reserves occupy a total area of 435.15km2.
Policy reforms in Ghana’s mining sector have introduced generous incentive packages for mining investors but have failed to provide solutions to community concerns. Difficulties have been encountered in harmonizing mining and environmental laws and policies in order to improve the conditions for local communities.
The Impacts of Mining and Dams on the Environment and Indigenous Peoples in Benguet, Cordillera, Philippines
The Cordillera region in Northern Luzon, Philippines, is homeland to more than 1 million indigenous peoples belonging to at least 8 distinct ethnic groups collectively known as Igorots. The Ibaloy and the Kankanaey, two of these ethnic groups, are found in the province of Benguet which occupies 265,538 hectares of the Cordillera region’s total land area of 1.8 million hectares. The southeastern portion is inhabited by the Ibaloy occupying 8 of the province’s 13 towns. The northeast areas of Benguet are dominated by the Kankanaey.
Since corporate mining started in 1903, the province of Benguet has hosted 14 mining companies. Some of these mines have closed down while others have continued. Presently operating in Benguet are two large mines– the Lepanto Consolidated Mining Company and the Philex Mining Corporation–using high technology for large-scale mineral extraction. Most of the total land area of Benguet is covered by past, ongoing and future mining operations
Accompanying mining operations is the construction of tailings dams needed to contain the mine wastes. These tailings dams were built across the river beds in various parts of Benguet. Across the years, tailings dams in Benguet have proved incapable of containing the volume of tailings that came from the mills. Time and again, these tailings have breached their dams. Benguet Corporation constructed 5 tailings dams. Lepanto has 5 tailings dams, 2 of which collapsed. Philex has 3 tailings dams, 2 of which collapsed in 1992 and 1994. In 2001, tailings breached another Philex dam. Itogon-Suyoc has 1 tailings dam that collapsed in 1994.
Large-scale corporate mining and dams have dislocated the indigenous Kankanaey and Ibaloy people from their ancestral lands and traditional livelihoods. Dams have caused the loss of ancestral lands to inundation and siltation. Descendants of families displaced by dams have been reduced to illegal occupants in the dam’s watershed areas or settlers in land owned by others. Indigenous communities were denied of their rights to ownership and control over their ancestral lands and resources due to the mining patents granted by the government to mining companies.
Mining concessions have also taken over lands used by indigenous peoples for their traditional livelihoods – rice fields, vegetable gardens, swiddens, hunting and grazing livestock. Siltation has damaged rice fields along riverbanks. Garden cultivators have lost their crops to surface subsidence. Traditional small scale miners have lost their pocket mines and gold panning sites to the big mines and dams. Some communities have lost entire mountainsides, burial sites and hunting grounds to ground collapse and deep open pits. Traditional fishing is no longer possible in polluted rivers, replaced by commercial fishponds in dam reservoirs.
An additional impact is the violation of the collective rights of the indigenous Kankanaey and Ibaloy people of their collective rights to self-determination and cultural integrity as they are displaced from the land and community that is the basis of their continued existence and identity.
The combination of mines and dams in Benguet had devastating impacts on the environment and on the Kankanaey and Ibaloy people in the province. These impacts have not only caused serious environmental destruction and suffering for the affected communities, but have also violated the collective rights of the indigenous peoples. As proven by the experience of the Benguet indigenous peoples, large-scale corporate mining and dams destroy, pollute, disrupt agricultural economies, and displace indigenous peoples.
II. DATA
A. The Green Policy of Palawan
Because of the continuous forest degradation in many tropical countries, environmental policies increased in number to prevent further environmental and ecological destruction in both remote and frontier regions. The Province of Palawan has a very rich biodiversity and the revitalization of the mining industries threatens not just the residents but also the various flora and fauna in the deep, vast and lush Palawan Forests. Philippine Republic Act 7611, also known as the “Strategic Environmental Plan for Palawan” Act was implemented and adopted on June 19, 1992 to ensure sustainable development in the province of Palawan.
This landmark legislation protects, enhances, and ensures the safety of the natural resources and the endangered environments in Palawan through the Environmentally Critically Areas Network (ECAN), which will create programs and plans to carry out the goals and provisions of the SEP Law.
The law declares that it is the policy of the State to protect, develop and conserve the country’s natural resources by supporting the implementation of plans, programs and projects formulated to preserve and enhance the environment while pursuing socio-economic goals. The policy, as declared, implies the inclusion of areas other than Palawan which can be subjected to the sustainable development activities appropriate for the people and the natural environment in which they live. It is also the task of the State to support and promote sustainable development through proper conservation, utilization and development of natural resources to provide optimum yields on a continuing basis. To this end, forest conservation and protection will be pursued by the State through the imposition of total commercial logging ban. No to Mining Industries; Yes to Eco-Tourism
Because this SEP Law promotes socio-economic goals without compromising its pursuit for having sustainable development and protecting the environment, it can be clearly understood that no other industry is allowed except for eco-tourism alone. Mining Industries and quarrying activities clearly violate this law.
Under Chapter II, Sec 9 of the SEP Law, the Management Scheme and Zonation of terrestrial component may be further subdivided into smaller management components for a more efficient supervision into the following zones: (a) Area of maximum protection or core zone; (b) Buffer Zone, and; (c) Manipulative Use Area. The Core Zone, provided for in the law, includes all types of natural forest like first growth forest, residual forest and edges of intact forest, areas above one thousand (1,000) meters elevation, peaks of mountains or other areas with very steep gradients, and endangered habitats and habitats of endangered and rare species. These areas, belonging to the core zone, should be absolutely free from human disruption and should be maintained and highly protected. Exceptions, however, may be granted to traditional uses of tribal communities of these areas for minimal and soft impact gathering of forest species for ceremonial and medicinal purposes.
The Rio Tuba Nickel Mining Corporation is currently situated in Barangay Rio Tuba, Municipality of Bataraza, Palawan which is one of the most diverse lowland forests in Palawan. This mining corporation is on its way of expanding across the Bulanjao Range, a mountainous forest which is clearly a protected area or a core zone under the SEP Law.
On an interview with President Aquino regarding the mining industries in Palawan, he said he is in favor for the large-scale industries because they are easier to be managed and checked. B. The Mining Company
Palawan, having the potential of becoming a commercial source of minerals particularly, nickel, is being threatened now by around 400 mining applications. Although, Puerto Princessa’s Mayor Edward Hagedorn and President Aquino cleared that Palawan is not going to accept anymore any mining applications, currently, Palawan has one main mining company that has operated since 1977–the Rio Tuba Nickel Mining Corporation. Since its operation, the Rio Tuba Nickel Mining Corporation has been mining nickel ores in the area of Barangay Rio Tuba, Bataraza, Palawan and exports it to Japan.
The Rio Tuba Nickel Mining Corporation (RTNMC) has a mining claim of 5,265 hectares of which 353 hectares are currently being operated. This pioneering mining company in Bataraza started when the nickel deposit in Rio Tuba was discovered in 1967. On September 18, 1970, the company entered into a Mining Lease Contract with the Republic of the Philippines as lessor, covering 126 hectares of public land or 110 Lode Mining claims of nickel, iron and other minerals located in Rio Tuba.
Despite several opposition from various civil society organizations and Palawan residents themselves the Department on Environment and Natural Resources still granted this company its Environmental Compliance Certificate (ECC) for the Mineral Production Sharing Agreement (MPSA) in 1997. On July 1, 2002, the Nissho Iwai Corporation and Rio Tuba Nickel Mining Corporation incorporated a joint-venture company for the project, the Coral Bay Nickel Mining Corporation (CBNC).

C. The Mining Act The Republic Act No. 7942 otherwise known as the Philippine Mining Act of 1995 was signed into law by then President Fidel V. Ramos on March 6, 1995. Essentially, RA 7942 is based on Article XII of the Philippine Constitution and thus mandates the State to manage the country’s mineral resources as owner and administrator, and to control and supervise exploration, development and utilization of mineral resources. The law reiterates the Constitutional provision that only the government may grant mining rights to individuals and corporations.
Under the Mining Act, the government may grant three major kinds of mining rights: (1) Exploration Permit which grants the exclusive rights to the permittee to explore a tract of land based on an approved work program. If a mineral deposit is delineated and found to be technically and economically feasible to be developed, and the permittee has the right to enter to any type of mining right with the government.
(2) Mineral Agreement which grants the contractor the right to conduct mining operations within the contract area for a period of 25 years, renewable for another 25 years. There are three types of this agreement: Mineral Production Sharing Agreement (MPSA), Joint Venture, and Co-Production Agreement. It allows 40% foreign equity.
(3) Financial or Technical Assistance Agreement (FTAA) – a contract involving large-scale mining operations with an investment of not less than $50 million. It allows the entry of 100% foreign-owned mining corporations who possess the qualifications set forth in the law and its implementing rules and regulations. This agreement has a term of 25 years, renewable for another 25 years.
The FTAA provision was severely criticized by civil society organizations. Critics contend that the mining act, through the FTAA, has allowed 100% foreign control over large-scale mining operations. They argue that the FTAA was unconstitutional since it violated the Article II, Section 2 of the 1987 Constitution which provides that the FTAA is an agreement for mere assistance, either technical or financial, in the development of mineral resources. Thus, the FTAA contemplated by the Constitution is not a mineral agreement, or a contract for the exploration of minerals. Nowhere in this provision does the Constitution allow foreign corporations to actually control, manage or engage in full mining operations. This became the chief argument against the Act among its opponents. Moreover, other militant organizations have also accused the government of selling the patrimony of the Philippines to foreign capital.
To attract foreign investors through the FTAA, the Philippine government, offers a package of fiscal incentives such as: fiscal and non-fiscal incentives in the 1987 Omnibus investment Code –which includes income tax holiday for 4 years for non pioneer and 6 years for pioneer projects; tax and duty free importation of capital equipment; pollution control devices; income tax-carry forward of losses; income-tax accelerated depreciation.
The Mining Act also offers investment guarantees, such as: repatriation of investment; remittance of earnings, remittance of foreign loans and obligations from contracts; freedom from expropriation, freedom from requisition of investment and confidentiality.
The law professes to respect the rights of indigenous peoples by containing a provision on Free and Prior Informed Consent (FPIC). It also includes provisions on environmental safeguards. Critics perceive these as token provisions or lip service, to sugar coat the primary motivation of mining corporations, that is, maximization of profit.
Community experiences on the use of the FPIC provisions tend to validate CSO/NGO skepticism of the sincerity of mining companies, with regard to their pronouncement of concern for social and environmental impacts of mining.
Finally, the Mining Act grants mining corporations, both foreign and local, the rights to use water and forest resources. It grants easement rights, which means the right to “ease out” any impediment to mining operations.
Despite the contention of the unconstitutionality of the mining act, in December 2004 the Supreme Court upheld its constitutionality and affirmed the prerogative of President Arroyo and the Congress to enter into financial or technical assistance agreements with foreign corporations for explorations, development and utilization of the country’s vast natural resources. D. Initiatives Towards Responsible Mining The revitalization of the mining industry is at the core of the economic programs of the Arroyo administration. The then President Gloria Macapagal-Arroyo has initiated a new paradigm towards responsible mining that adheres to the principles of sustainable development. This led to the issuance of Executive Order No. 270 on 16 January 2004 which provided for a set of principles that will govern the revitalization of the mining industry. The guiding principles for responsible mining follow the triple bottom line of sustainable development which are: economic development, environmental protection and social equity.
The Department of Environment and Natural Resources (DENR) have prepared, with collaboration of other agencies and after several consultations with various stakeholders, the Minerals Action Plan (MAP) that will operationalize E.O. No. 270, and will address the specific obstacles to revitalize the mining sector. The MAP, containing 57 strategies and 126 specific activities, was approved by the President through Memorandum Circular No. 67 last 13 September 2004. The DENR is tasked to oversee and monitor the implementation of the MAP.
The DENR has significantly simplified and streamlined mining permitting process and provided assistance to proponents in securing permits from other agencies. The department issued DENR Administrative Order No. 2004-54 and Memorandum Order Nos. 2004-09 and 2004-10, which has simplified the procedures and requirements for mining applications.
Other important tasks for the implementation of MAP is to ensure and facilitate the delivery of benefits from mining to host Local Government Units and communities, reactivate and rehabilitate idle and abandoned mines and resolve land use conflicts through valuation and Environment and Impact System.
In order to help the economy grow and sustain poverty alleviation programs, the Arroyo government has made the minerals industry an important component of the Medium-term Philippine Development Plan (MTPDP). The MTPDP identifies the promotion of responsible mining as among the five major thrust which the environment and natural resources sector will pursue in the midterm. In line with the paradigm shift, President Arroyo issued the Excutive Order 734 placing the Palawan Council for Sustainable Development (PCSD) under the DENR. Palawan officials accuse the Malacanang for laying the groundwork for the unhampered entry of mining by clipping the powers of the PCSD which issues environmental clearances and permits to mining companies. E. Risks of Mining Mining is the excavation of useful minerals that come from within the earth. In the case of the Province of Palawan, nickel ores are being mined in commercial amounts by the Rio Tuba Nickel Mining Corporation.
In a recent presentation before the foreign business community, Mines and Geosciences Bureau Director Horacio Ramos said new mining investments reached US$822 million as of second quarter of 2007. This was the amount infused into the industry since the Supreme Court affirmed the constitutionality of the Philippines Mining Act of 1995 (Republic Act No. 7942) on December 1, 2004.
Mr. Horacio said potential additional investments of US$10.51 billion are expected between now and 2011. (The Economist: 2007) The contribution of the mining sector to the Philippines’ gross domestic product (GDP) amounted to PhP59.7 billion at current prices (US$1.2 billion), representing about 1 percent of the GDP in 2006. However, this was nearly double the sector’s contribution back in 2002. The sector contributed PhP46.7 billion in 2005, PhP41 billion in 2004, PhP31.8 billion in 2003, and PhP25.5 billion in 2002. Mineral exports accounted for 4.46 percent of total RP exports in 2006, up from just 2 percent in 2005. However, this was still way below the 25 percent contribution of the mining sector to national exports in the 1970s. (The Economist: 2007)
As of June 2007, some 141,000 individuals were employed in the industry, representing 0.43 percent of the labour force. However, according to the MGB it should be noted that over 35,000 new jobs have been generated over the last three years alone. The government collected PhP4.9 billion (US$100 million) in taxes, fees and royalties from mining operations in 2006, but Director Ramos said this is expected to rise once final figures from the Bureau of Internal Revenue (BIR) are factored in Indigenous People
Although liberalized mining industries may create these positive roles in the Philippine Economy, we can never leave behind the risks and the ill effects of mining industry. Mining Activities, while extracting minerals from the earth, needs land for its excavation process. These lands, like in the case of Palawan, were usually deep forests with rich biodiversity. What we have in the Province of Palawan are not naturally barren lands but are originally home not only to thousands of kinds of flora and fauna, but also to the indigenous people residing in the areas.
Ultimately, mining in these areas of Palawan will devastate the indigenous communities and the land they need to survive. As “Voices from the Lost Frontier” shows, the pristine forests are already being torn apart; local fish stocks and water supplies are being poisoned; and productive farmlands are being covered in laterite (which is causing a significant drop in rice production).(Intercontinental.org)
With the liberalization of mining industries since the implementation of the 1995 Mining Act, forms of resistance from various sectors like environmentalists, lawyers, and the indigenous people themselves have been voiced out and expressed to stop the area expansion of the present existing mining companies. In case of expansion, indigenous people will eventually become homeless and their source of food, water, shelter, and other basic needs will vanish.
The Indigenous Peoples have not given their free, prior and informed consent. Instead, they have been effectively “dragged off to the side” through various bribery gimmicks and other schemes to trick them into endorsing the mining operations–even without their knowledge.
At the same time, the mining companies are being permitted to operate in areas that are supposed to be protected by laws like the Strategic Environmental Plan for Palawan (SEP).
III ANALYSIS Endowed with rich deposits of minerals, the mining sector is considered as the driving force of the Philippine economy. However, the industry experienced a lull in the late 1980s due to the low world prices of the country’s principal metal products; the higher costs of maintaining the mines, and; costly explorations, developments, and operations of new mineral deposits.
Looking at the situation in a neo liberal perspective, the decline of the mining industry was primarily caused by the lack of both local and foreign investments. High excise taxes, high tariffs on imported capital and chemical inputs and restrictive foreign investments policies are the major contributors to the industry’s decline. The mining firms are focusing on the high excise rate which is 5% of gross output value. This tax level may be manageable if world metal prices are high; however, in cases when the international and local conditions are not favorable to mining, high taxes are bane to mining firms.
In order to revive and maximize its full potential, the Philippine Mining Act of 1995 was promulgated which paved the way for the liberalization of the mining industry. Fundamental to neoliberal policies –such as the mining act–are privatization, low public spending, deregulation, tax cuts and free trade.
International financing and development aid institutions such as the World Bank and the International Monetary Fund (IMF) were instrumental to the liberalization of the country’s mining industry. This liberalization, via the RA 7492, is part of the Structural Adjustments Programs of the World Bank and the IMF in the 1980. The World Bank’s agenda can be gleaned from the Bank’s recommendation tied to a proposed loan of the Philippine for an Economic Integration Program in 1992. Among the Bank’s conditionality is to undertake efforts to attract more investors and to expand the coverage of foreign participation in various industry including mining.
The National Policy Agenda on Revitalizing Mining in the Philippines, as embedded in the Executive Order 270 of the Arroyo administration, is also in line with thrust of the World Bank towards liberalization. These liberalization measures have reached its peaked in December 2004 when the Supreme Court reversed its earlier decision that stated that certain provisions of RA 7942 were unconstitutional.
In the case of Palawan, the thrust toward the liberalization and revitalization of the mining industry has allowed the Rio Tuba Nickel Mining Corporation, the current and only large-scale mining company in Palawan, to expand its location from Barangay Rio Tuba to the Bulanjao Mountain ranges–which is identified as a core zone or an area of maximum protection by the PCSD. The expansion, as permitted by the mining act, clearly undermines the existing SEP Law. IV CONCLUSION Evidently, the wide range of fiscal and non-fiscal incentives such as tax reductions provided by the Philippine Mining Act of 1995 has created a favorable investment climate for the mining industry. The shift towards the liberalization of the mining industry has attracted foreign investors, creating a number of mining havens that were perceived as the key to the revival of the mining industry.
With the move for the liberalization and deregulation of mining industries, mining’s contribution to Philippine GDP has been increasing since the push for its revitalization under the Arroyo administration. This push has been influenced by the World Bank’s goal of expanding and creating mining regimes in Asia, particularly in the Philippines. The international structure like the World Bank, has been ensuring policy reforms and new legislations to assure protection of capital, promote investment, and allow developing countries to experience a great investment boom in their minerals, oil, and gas sectors.
Although mining industry has been perceived by the government to be good for the Philippine economy, many people and even many different sectors, are seeing mining as an ecologically disruptive activity which has affected Palawan’s indigents and environment.
These ecological and environmental risks include the displacement of homes and habitats of the indigenous people; massive disruptions and devastation of forest-mountains; and harsh effects on farms because of chemicals produced from the mining industry like the laterite. All these have violated the SEP Law entitled to protect Palawan’s most bio diverse regions.
Although efforts have been made to implement a sustainable mining, it is still elusive and impossible to be achieved. Mining activities always bring with it, its extractive use and exploitative approach to the environment. Mining would always promote denuding of mountains and forests, which is far from being sustainable.
In Economics, we learned that one of its basic tenets is trade-offs. The problem of the issue is the impact of mining on the environment versus the necessity of the minerals mined. Between sustainable development and economic prioritization through revitalized mining industries, we just have to decide whether we go for long term profit or for short term economic investment boom. V RECOMMENDATIONS According to Robert Cox, the implications of neo liberalism can be summed up into three main parts: (a) Democratic Deficit; (b) growing pressure to protect the environment, and; (3) Surrender of state authority to corporate financial and economic interests. In order to mitigate these implications the researchers would like to recommend the following measures: * A more extensive and inclusive consultations among the stakeholders. Consultations that would effectively hear out and consider the demands of the concerned and affected people—including the indigenous people. * Proper representation from various sectors in the decision making-process. * Effective implementation of the 1992 Strategic Environmental Plan for Palawan Act and the Indigenous People’s Rights Act of 1997.

REFERENCES 1. A. Books * Chilcote, Ronald H. (2000). Comparative Inquiry in Politics and Political Economy: Theories and Issues. Oxford: Westview Press. * Lopez, Salvador P.(1992). Isles of Gold: A History of Mining in the Philippines.Commissioned by the Chamber of Mines in